Some States Show Interest in Medicaid Funding Caps

August 27, 2019

It’s now been more than seven months since news emerged that the Trump administration wants to use waivers to bring block grants to Medicaid. The administration has since moved closer to doing so, as a document titled “State Medicaid Director Letter: Medicaid Value and Accountability Demonstration Opportunity” has been on the Office of Management and Budget’s website since June 6.

What’s more, some states have made moves that suggest they would try to cap their Medicaid funding if given the green light by CMS. Tennessee is drawing up a waiver request that would move TennCare from an open-ended entitlement program to one with fixed federal payments, in exchange for more flexibility.

By Leslie Small

It’s now been more than seven months since news emerged that the Trump administration wants to use waivers to bring block grants to Medicaid. The administration has since moved closer to doing so, as a document titled “State Medicaid Director Letter: Medicaid Value and Accountability Demonstration Opportunity” has been on the Office of Management and Budget’s website since June 6.

What’s more, some states have made moves that suggest they would try to cap their Medicaid funding if given the green light by CMS. Tennessee is drawing up a waiver request that would move TennCare from an open-ended entitlement program to one with fixed federal payments, in exchange for more flexibility. And Utah recently submitted a waiver proposal that would apply per capita caps to its Medicaid program, giving the state a fixed amount of federal money per enrollee.

“We would expect to see that if they do approve some kind of block grant waiver somewhere, the administration is likely to give that state possibly some pretty favorable financial terms [that] would not be in place for all states,” says Joan Alker, executive director of the Georgetown University Center for Children and Families.

That, she says, would help the administration make the case to Congress to apply Medicaid funding caps to the whole country. “But it would be a sham experiment because congressional proposals are all about significant cuts,” Alker adds.

According to Alex Shekhdar, founder of Sycamore Creek Healthcare Advisors, “there would absolutely be legal challenges” if Medicaid block grant or per capita cap waivers move from concept to reality. Looming over both funding-cap waivers and Medicaid work requirements waivers, he says, “is a conversation about what kind of administrative authority the HHS secretary has.”

Aetna, Centene Lose Louisiana Medicaid Contracts for 2020

August 22, 2019

It’s been a rough August in Medicaid managed care in various ways, as is perhaps best illustrated by two publicly traded giants in the field: CVS Health Corp.’s Aetna Medicaid unit and Centene Corp. Both Aetna Better Health of Louisiana and Centene’s Louisiana Healthcare Connections recently learned they lost out on Louisiana’s Medicaid plan contracts for 2020.

The Louisiana Dept. of Health on Aug. 5 announced its intent to contract with four Medicaid managed care organizations — AmeriHealth Caritas Louisiana, Community Care Health Plan of Louisiana (Healthy Blue), Humana Health Benefit Plan of Louisiana, and UnitedHealthcare Community Plan of Louisiana — following a state bid process that began in February.

By Judy Packer-Tursman

It’s been a rough August in Medicaid managed care in various ways, as is perhaps best illustrated by two publicly traded giants in the field: CVS Health Corp.’s Aetna Medicaid unit and Centene Corp. Both Aetna Better Health of Louisiana and Centene’s Louisiana Healthcare Connections recently learned they lost out on Louisiana’s Medicaid plan contracts for 2020.

The Louisiana Dept. of Health on Aug. 5 announced its intent to contract with four Medicaid managed care organizations — AmeriHealth Caritas Louisiana, Community Care Health Plan of Louisiana (Healthy Blue), Humana Health Benefit Plan of Louisiana, and UnitedHealthcare Community Plan of Louisiana — following a state bid process that began in February.

Out of 1,500 maximum points for the MCOs’ RFP, Centene’s subsidiary scored the lowest at 621 points, followed by Aetna’s 669 points, while the four winning plan bidders scored in the 700s or 800s, according to the state health agency’s summary score sheet.

Timing remains an issue as potential legal disputes could further complicate matters. State officials said Louisiana expects to execute the Medicaid contracts on or about Aug. 23. Open enrollment is slated to run from Oct. 15 through Nov. 30, when members can select new plans, but state officials acknowledged the implementation timeline could stall in the event of a protest.

In fact, Aetna and Centene filed protests with the state on Aug. 19 charging that the bidding process was tainted.

“We were shocked and confused by the state’s decision, and very concerned for our 450,000 members,” a Louisiana Healthcare Connections spokesperson told AIS Health on Aug. 15.

“Transitioning a half-million members within 45 days is a massive undertaking, and we are deeply concerned about that transition leading to disruptions in care for our members,” the spokesperson added.

In Push to Innovate, Large Employers Seek Heath Plan, PBM Help

August 21, 2019

Large employers are increasingly leaning on their health plan and PBM partners to devise innovative solutions to health care challenges, according to the 2020 Large Employers’ Health Care Strategy and Plan Design Survey conducted by the National Business Group on Health (NBGH).

In the 2019 survey, 32% of large employers said they would take a “defer to partners approach” to drive health system change — implementing what their health plan and PBM present as the latest developments. For 2020, that share rose to 41%.

By Leslie Small

Large employers are increasingly leaning on their health plan and PBM partners to devise innovative solutions to health care challenges, according to the 2020 Large Employers’ Health Care Strategy and Plan Design Survey conducted by the National Business Group on Health (NBGH).

In the 2019 survey, 32% of large employers said they would take a “defer to partners approach” to drive health system change — implementing what their health plan and PBM present as the latest developments. For 2020, that share rose to 41%.

NBGH attributes that trend to a number of factors, Ellen Kelsay, NBGH’s chief strategy officer, said at a press briefing. One is that employers are “frustrated with the slow pace of change” in health care and are looking to their partners to speed it up. Most employers also lack the bandwidth to drive change on their own, she said.

What’s more, “many employers are looking for a way to streamline and consolidate their offerings,” Kelsay said, noting that the ecosystem of solutions that employers have at their disposal is “far too extensive.”

Employers are also turning to their health plan and PBM partners to figure out how to finance and manage high-cost therapies, NBGH President and CEO Brian Marcotte said at the briefing. The survey revealed that such high-cost therapies — like Novartis’ $2.1 million spinal muscular atrophy drug, Zolgensma — are employers’ No. 1 concern when it comes to managing their pharmacy benefit plans.

So how can health plans and PBMs meet employers’ desire for more help driving health care change?

They “can be proactive in reaching out to their clients to engage them on emerging trends and opportunities and propose solutions, rather than waiting for their clients to approach them,” Marcotte tells AIS Health via email.

Harvard Pilgrim Health Care, Inc. and Tufts Health Plan said Aug. 14 that they intend to merge — a move that industry experts say will give them the scale they need to compete in an ever-more-consolidated health care market.

“There’s been massive consolidation in Massachusetts’ health systems and health insurance industry, and this is the latest and largest merger — but likely not the last,” says Joseph Paduda, a principal with Health Strategy Associates, LLC.

By Leslie Small and Judy Packer-Tursman

Harvard Pilgrim Health Care, Inc. and Tufts Health Plan said Aug. 14 that they intend to merge — a move that industry experts say will give them the scale they need to compete in an ever-more-consolidated health care market.

“There’s been massive consolidation in Massachusetts’ health systems and health insurance industry, and this is the latest and largest merger — but likely not the last,” says Joseph Paduda, a principal with Health Strategy Associates, LLC.

“The Harvard Pilgrim-Tufts deal is just what we should expect in a highly mature industry; scale matters most,” Paduda says. “Providers and payers are all moving to build market power in anticipation of the next round of negotiations around reimbursement and related issues.”

The desire to compete with Blue Cross Blue Shield of Massachusetts, which dominates the commercial insurance market in the Bay State, is another major factor driving the Harvard Pilgrim-Tufts deal, says Dan Mendelson, founder of the consulting firm Avalere Health.

As for other plans competing in Massachusetts, Rosemarie Day, founder and president of Day Health Strategies LLC, says, “I think it makes things tougher for Fallon [Health] probably.” Fallon, though, has “niche” with its a strong regional presence in the central part of the state, “and they have their own clinics [and are] trying to manage costs of care in-house,” Day adds.

Both insurers’ boards have already unanimously approved the merger, but their press release notes that it is still “subject to multiple local and federal regulatory approvals.”

Mendelson says he expects Harvard Pilgrim and Tufs will “have a high hurdle to overcome in getting approval for the transaction.”

The approval process will also probably be complicated by the fact that Massachusetts Gov. Charlie Baker (R) once served as CEO of Harvard Pilgrim, he points out.

Insurers Strive to Help Members Kick Smoking Habit

August 14, 2019

Recent research from the Centers for Disease Control and Prevention indicates that the percentage of Americans trying to quit smoking has leveled off in recent years, with most states experiencing no change in quit-attempt prevalence from 2011 to 2017.

The Affordable Care Act, Medicare and Medicaid programs, and other federal regulations already require health plans to cover a range of smoking-cessation treatments and support. But some insurers are opting to offer more robust tobacco-cessation programs to members.

By Leslie Small

Recent research from the Centers for Disease Control and Prevention indicates that the percentage of Americans trying to quit smoking has leveled off in recent years, with most states experiencing no change in quit-attempt prevalence from 2011 to 2017.

The Affordable Care Act, Medicare and Medicaid programs, and other federal regulations already require health plans to cover a range of smoking-cessation treatments and support. But some insurers are opting to offer more robust tobacco-cessation programs to members.

One example is Blue Shield of California, which in June launched a new “digitally based lifestyle medicine and health platform” called Wellvolution. Consumer choice is a key component of Wellvolution, so members who indicate they’re interested in quitting smoking are given the option of three programs: one that’s more heavily focused on telephonic support, and two that are “more app- and digital-coaching based,” says Angie Kalousek, director of markets and lifestyle medicine for Blue Shield of California.

“The one thing that we don’t really believe in and have not integrated [in the Wellvolution platform] is financial incentives,” she adds. That tactic, Kalousek says, is a “false motivator that doesn’t create sustained change.”

Like Blue Shield of California, Cigna Corp. offers members more than one option for tobacco cessation support.